New Westminster condo development in jeopardy
Last Updated: Wednesday, May 21, 2008 | 8:47 PM PT
CBC News
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The Anvil condo development in New Westminster is facing cost overruns. (CBC)Another condominium development in the Lower Mainland is in trouble, CBC News has learned.
United Properties, the developer behind The Anvil in New Westminster, has run out money, and that means pre-sale buyers are being asked to pay $20,000 to $40,000 if they want to keep their condos.
Pre-sale buyers have received letters from the developer saying they have 14 days to decide whether they want to pull out and get their deposit back or pay the additional costs. The project needs an additional $4 million to meet its financial obligations.
"Development is a tough game and United Properties has been at it for some time, so it is quite unique to have such a developer run into this kind of difficulty," said real estate lawyer Ron Usher.
Real estate lawyer Ron Usher says it's unusual to see a such a successful developer run into major cost overruns. (CBC)The developer blames escalating labour and material costs, as well as unforeseen delays including the construction of a nearby SkyTrain station.
However, one of Canada's most successful condo marketers said pre-sale buyers should not have to pay for cost overruns.
"I've always just held the policy that if a developer makes money he doesn't send money to the buyer, and if a developer is losing some money why does the buyer have to put that money in," said Bob Rennie, the director of Rennie Marketing Systems.
The Urban Development Institute, a non-profit association that represents the development industry in B.C., said this is the first time this has happened with one of its members.
"Maybe the Urban Development Institute representing the developers … should have a mediation process. Maybe there should be somebody there to look after the consumer," Rennie said.
Bob Rennie says purchasers should not have to foot the bill for cost overruns. (CBC)The Anvil is already 18 months behind schedule, and the new delays mean the earliest the project will be finished is late summer or early fall.
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